ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles By Nishanth Kumar

Distributional Dynamics of Income in Indian States

The distribution of income across Indian states for 2014–19 is examined in this paper. Particularly concerning in terms of high inequality are Uttar Pradesh, Telangana, Chhattisgarh, Madhya Pradesh, Maharashtra, Gujarat, Punjab, and Haryana—both income shares and real income growth in the bottom decile have declined from 2014 to 2019 in almost all these states. Across states, while Scheduled Caste and Scheduled Tribe populations and small/marginal farmers and labourers are disproportionally represented at the bottom of income distributions, these groups are the most economically impoverished and increasingly vulnerable (due to declining real incomes) in the high inequality states. Using a stochastic model of income growth, this paper finds that states with high inequality are characterised by a negative redistribution of resources from poor to rich, raising concerns about the future of low incomes in these states.

Income and Inequality across Rural–Urban, Occupational, and Caste Divides

The evolution of income in India from 2014–19 is analysed, and it is found that the lower end of the income distribution has experienced significant losses—the bottom ventile shows not only a decline in income share of ~41% but also a negative real average income growth of -5.5% per annum. Further investigating the composition of this part of the distribution using rural and urban splits, it is found that even as income shares at the bottom of the urban distribution have increased over time, those at the bottom of the rural distribution have decreased—income share of the bottom decile of the rural income distribution declined by ~43%, and the real average income growth of this decile was -5% per annum. The bottom ventile of the consolidated Indian income distribution is composed primarily of rural incomes and therefore the decline in real incomes is essentially a rural phenomenon.